the possibility of bankruptcy or default, and less earnings are available to meet interest payments, and that the business is more vulnerable to increases in interest rates.
3. Total Debt ratio: it shows how much the company relies on debt to finance assets. The debt ratio gives a quick measure of the amount of debt that the company has on its balance sheets compared to its assets.
For 2011= 0.5 and for 2010= 0.417.
We can see that the ratio increased, which means the greater the risk associated

cost ratio, and it played to the company´s key strength – creating a unique experience for its consumers.
The cash flows excluded all financing charges and non-cash items (i.e. depreciation), and were calculated on an after-corporate-tax basis. The New Heritage’s corporate tax rate is 40%. We think that the Design Your Own Doll project is more compelling.
2. Use the operating projections for each project to compute a NPV for each. Which project creates more value?
(Please find the calculations

operating earnings of the firm. The capitalization is to be made at a rate appropriate to the risk class of the firm.
Growth Plans, are involved in capital structural theories in which a certain amount will be allocated for the growth plans. A finance manager should draw a plan according for the dividend policy.
For Example: The firm has $10 million as equity capital and $6 million as debt capital and the firm made a profit (after tax) of $2 million, and the fund allocated to the growth plan was

Corporate Finance Exam with Answers
Posted on May 10, 2012 by Sam
Corporate Finance, Chapters 8, 9 & 10. Exam Questions:
1. A project’s opportunity cost of capital is: A. The forgone return from investing in the project.
2. Which of the following statements is correct for a project with a positive NPV? A. The IRR must be greater than 1.
3. What is the NPV of a project that costs $100,000 and returns $50,000 annually for 3 years if the opportunity cost of capital is 14%? C. $16,085

Corporate finance
When investors prefer low dividend payout and what is the relation between dividend payout and cash flow (what will increase and what will decrease when using low dividend payment?)
Dividend payout ratio refers to the amount of earnings of a particular company that seeks to issue out to its investors in the form of cash dividends. Dividends payouts may vary depending on the industry and a low dividend payout may signify a good thing or a bad thing. Investors who may opt for

Final Exam Corporate Finance FINC 650 1. Which of the following is not considered a capital component for the purpose of calculating the weighted average cost of capital as it applies to capital budgeting? a. b. c. d. e. Long-term debt. Common stock. Short-term debt used to finance seasonal current assets. Preferred stock. All of the above are considered capital components for WACC and capital budgeting purposes.
2. A company has a capital structure which consists of 50 percent debt and 50 percent

Corporate finance
P. Frantz, R. Payne, J. Favilukis
FN3092, 2790092
2011
Undergraduate study in Economics, Management, Finance and the Social Sciences
This subject guide is for a Level 3 course (also known as a ‘300 course’) offered as part of the University of London International Programmes in Economics, Management, Finance and the Social Sciences. This is equivalent to Level 6 within the Framework for Higher Education Qualifications in England, Wales and Northern Ireland (FHEQ). For more